ExxonMobil, along with its other co-venturers, Hess Corporation, Ratio Petroleum and Cataleya Energy, held high hopes that the Tanager-1 exploration well on the Kaieteur Block would follow in the footsteps of all the discoveries on the Stabroek Block.
But after local and foreign investors spent approximately US$100 million, the thickness of the reservoir and heavy nature of the oil has proven to be a big disappointment.
Earlier Tuesday, Westmount Energy, a United Kingdom investment firm which owns shares in Ratio Petroleum and Cataleya Energy, announced that the Tanager-1 well encountered heavy oil over 16 meters of reservoir but is considered to be non-commercial as a standalone development.
Westmount stated that the Tanager-1 exploration well is the deepest well drilled in the Guyana-Suriname Basin to date. Ratio Petroleum also noted in its press release in Israel that the well, which was spudded on August 11, 2020, using the Stena Carron drillship and reached a total depth of 7,633 meters, cost a whopping US$100 million.
Although Tanager-1 produced very disappointing results, the high hopes about its potential to replicate the success seen early on in its sister block, Stabroek, were premised on a Competent Persons Report (CPR) by the Netherland, Sewell and Associates Inc. (‘NSAI’). That document describes Tanager as a stacked reservoir prospect and was assigned a best estimate of 256.2 million barrels of prospective resource with geologic success pegged at 72 per cent.
The outcome of Tanager-1 discovery has already dealt a blow to one of the partners of the block, Ratio Petroleum. Its share price tumbled by 56 per cent in wake of the news Tuesday, demonstrating the enormous financial risk involved in drilling for oil in the Guyana Basin, there being no guarantee of a find.
The Kaieteur Block is currently operated by ExxonMobil’s subsidiary, Esso Exploration and Production Guyana Limited (35%), with Cataleya Energy Limited holding a 25% working interest, Ratio Guyana Limited having 25%, and a subsidiary of Hess Corporation holding 15%.